AST SpaceMobile (NASDAQ:ASTS) Q2 2022 Earnings Call

0:00 Good day and thank you for standing by. Welcome to the AST SpaceMobile second quarter 2022 business update call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Scott Wisniewski, Chief Strategy Officer of AST SpaceMobile. Please go ahead.

0:21 Thank you and good afternoon, everyone. Let me refer you to slide two of the presentation, which contains our safe harbor disclaimer. During today's call, we may make certain forward-looking statements. These statements are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual events to differ materially from the forward-looking statements on this call. For more information about these risks and uncertainties, please refer to the Risk Factors section of AST SpaceMobile's Annual Report on Form 10-K for the year that ended December 31, 2021. with the Securities and Exchange Commission and other documents filed by ASC SpaceMobile with AFCC from time to time. Readers are cautioned not to put undue reliance on forward-looking statements, and the company specifically disclaims any obligation to update the forward-looking statements that may be discussed during this call.

1:10 Also, after our initial remarks, we will be starting our Q&A section with questions submitted in advance by our shareholders. Now, referring to slide three, for those of you who may be new to our company and our mission, There are over 5 billion mobile phones in use today around the world, but many of us still experience gaps in coverage as we live, work, and travel. In this backdrop, ASP SpaceMobile is building the first and only global cellular broadband network in space to operate directly with standard, unmodified mobile devices based on our extensive IP and patent portfolio. Our engineers and space scientists are on a mission to eliminate the connectivity gaps faced by today's 5 billion mobile subscribers and finally bring broadband to the billions who remain unconnected.

1:56 Since our last quarterly business update, we have made strong progress and it is my pleasure to now pass it over to Chairman and CEO, Abel Avellan, who will take you through right now.

2:06 Thank you, Scott. I would like to do a quick technology and industrialization update. Let me start with Blue Walker 3. Blue Walker 3 has been delivered to Cape Canaveral and it is planned to be launched on a launch window that starts early to mid-September. In parallel to the construction of Blue Walker 3, we are building the next five satellites that are under initial construction phase using designs and parts similar to what we have in Blue Walker 3, including FPGA reaction wheel, antennas,

2:49 and they are planned to be launched in late 2023.

2:52 In parallel to that, we also have substantially complete the commercial agreements with partners and vendors in order to get access to the components that we will need for the next five Block 1 satellites and the next generation satellites. Also, we're on target with our extension facility, Site 2, to support our scheduled plan of launches. A little more detail of what happened when we launched Blue Walker 3, what would be the launch and testing timeline. In July 19, we transported Blue Walker 3 to California for testing, environmental testing. That was successfully completed in California.

3:39 On August 9, we transported Blue Walker 3 to Cape Canaveral, where we continued testing. We're continuing testing here in the Cape. while at the same time we're completing preparation for the launch. Then the launch is planned for a window between early September to mid-September on a Falcon 9 from Cape Canaveral. E plus two, so two months after the launch, approximately two months after the launch, we will have located place into its orbit. We will initiate initial in-orbit testing. We will unfold the array and we'll deploy the QVL-10 for initiating communication to Iran.

4:25 And then, from the launch, all the way through initial six months, we will start a campaign to test in our broadband direct-to-cell phone and many more. We will also be testing BlueWalker 3 satellite using Nokia and Rakuten infrastructure to interconnect with the local operators. And that's kind of what we have as a plan for BlueWalker 3 from now to launch. Continue in the business momentum.

5:10 continue to be strong. We had added three new operators, including a memorandum of understanding with Safran Telecom in Indonesia. Indonesia is a large and important market. With them, we had reached more than 1.8 billion subscribers that we can access through the agreements or memorandums of understanding that we have with operators around the globe. We have increased our patent portfolio to more than 2,400 patent and patent pending claims to support our strong expanding competitive advantage. We also have achieved an agreement to sell a majority ownership of Nano Avionics and an enterprise value of $65 million.

6:00 The company expects to receive approximately $27 million in net proceeds at closing. and just recently, we have completed an agreement with Nokia for the 4G and 5G technology to be integrated into our space network. The technology that we'll be using for them is the EarthCare system, which is planning to be offered as the interconnection infrastructure between our satellite infrastructure and the MNO infrastructure. And with that, I would like to I hand it over to Sean, our Chief Financial Officer. Thanks, Abel. Good afternoon, everyone. These are exciting times for AST, and I want to thank the entire AST team for their efforts in getting the Blue Walker 3 test satellite to Cape Canaveral. There has been an incredible amount of hard work and dedication for this to happen, and it has truly been a team effort.

7:01 As I reflect on my first three months at AST, I continue to be impressed by the significant progress our company has made over the past few years. This progress has been recognized through the interest from large, important third parties including MNOs with whom we have agreements and understandings representing over 1.8 billion subscribers and through our recent announcement with Nokia where one of the leading mobile equipment providers in the world has recognized the potential of our system and is willing to invest significant time and resources to support our efforts. Let me move on to a discussion about some of our key operating metrics that are presented on slide seven. Looking at the first chart, we see for the second quarter of 2022, we had non-GAAP adjusted operating expenses of $31.8 million versus $29.4 million in the first quarter.

7:54 Non-GAAP adjusted operating expenses exclude non-cash operating costs, including depreciation and amortization and stock-based compensation, totaling $3.6 million and $3.4 million in the second and first quarter, respectively. We expect to continue to expand that level of operating expenses for the next two quarters. The $2.4 million increase in adjusted operating expenses compared to the first quarter was related to increased employee costs, and other research and development and engineering expenses as we ramp up the development and infrastructure investments to support the Bluebird program. In the second chart on the page, you can see that our total property, plant and equipment increased by $9.4 million in the second quarter.

8:40 This compares to an increase of $19 million in the first quarter. The $9.4 million and $19 million represent our capital expenditures for those periods. A payment to our launch provider in the first quarter was the reason for the larger capital expenditures in the first quarter. And on the final chart on the slide, we ended the second quarter with $202.4 million in cash. We believe this cash is sufficient to support our cash expenditures for more than the next 12 months. In addition to this cash on hand, we have been working hard to develop other sources of cash and liquidity to supplement our activities. We understand the capital-intensive nature of our project, and we are highly focused on exploring a wide range of options in order to efficiently fund our efforts.

9:30 As our Blue Walker III satellite now resides in Cape Canaveral, we are now focusing our investments towards the production of our Blue Bird satellites. We believe a key advantage of the SpaceMobile system is its ability to be deployed in a phased manner where we can target a modest number of satellites We believe this ability to phase in our coverage will provide us a first-to-market advantage and enable us to work with MNOs to introduce services and develop the market. We currently estimate the capital expenditures required for the design, assembly, and launch of our first 20 commercial satellites to be approximately $300 million to $340 million. This is an increase from a midpoint of $14 million per satellite to $16 million per satellite, or a little over 14%. The estimated capital cost to complete the satellite configurations has increased from our prior estimates due to a number of factors. The initial five satellites, which we expect to launch in late 2023, will now use existing components from our Blue Walker 3 test satellite design, including certain integrated circuit components, navigation controls, and antennas. We benefit from this change in mix of satellites as it will enable AST to construct and launch these satellites sooner.

10:53 But this will also result in an increase in cost per satellites due to the current higher cost of these first generation components. In addition to this change in the mix of our first 20 satellites, a number of factors including inflation, supply chain disruptions, design changes, and increases in the cost of electronic components, assembly equipment, launch costs, salaries and other aspects of our satellite design and assembly activities has increased the cost to design, assemble and launch our satellites. These estimated cost trends are preliminary estimates and based on certain assumptions and information currently available to us and are subject to change based on numerous factors described earlier as well as delays in the development of components and materials I am encouraged by the progress that the team has made, and I'm excited about the company's future as we transition from the development phase to commercial satellite production.

11:54 Thank you for your continued support of the SpaceMobile mission, and with that, I'll turn it back to Scott. Thanks, Sean.

12:03 Before we go to the queue of analyst questions, I'd like to address a few of the questions submitted ahead of the call by our investors. Operator, could you please start us off with the first question? Terry from Georgia asks, what is the ramp-up plan for Bluebird launches and deployments post-production?

12:21 Thank you, Terry, for the question. Our plan is to use our two production facilities in Midland, Texas. One, which is the production facility that we used to build Blue Walker 3, and Site 2, which is the production facility where combined with Site 1 we are allowed to scale up up to six satellites per month production. So we're taking a phase approach. We are first building our next block of satellites using similar technologies and a combination of our current facility and Site 2 in order to launch, to support the launches that we have next year and then to follow up and extend our site in order to support the six satellites per month production capability.

13:19 Steve from Arizona asked, will the proceeds from the sale of AST's stake in nano and equity sold under the B. Reilly facility generate enough proceeds to complete phase one of the SpaceMobile constellation? Or will other actions such as tapping into the mixed shelf offering be needed? Thanks for that. As we disclose in our filings, we look to manage our business with liquidity for at least the next 12 months. And as I stated earlier, we believe we have enough cash and resources to fund our activities for the next 12 months. Having said that, we will need to raise additional capital before entering into Phase 1 commercial service with 20 satellites. As part of this capital-raising effort, we have been working on a number of fronts, including the filing of a $500 million shelf, for debt, equity, and preferred. We sold Nano, which will provide us $28 million in gross proceeds. And we are in advanced stages in securing an equipment facility, which will help us purchase equipment in our manufacturing facility.

14:21 We will be opportunistic in raising this capital and strategic and continue to raise capital in a variety of sources in order to fund out our plan. Rick from the Netherlands asked, Can you please explain the expected average cost of the Bluebird satellites compared to the cost Blue Walker 3? Yeah, Rick. The Blue Walker 3 costs are a result of one-time research and development, building out supplier relationship, seeing what works and doesn't. And a lot of that expenditure will be done once, but not again. Our Block 1 Bluebirds will benefit from these learnings, design and manufacturing and material selection, As well as scale economics and prior upfront investment. As I mentioned earlier, the increase in our capital costs estimates for the first 20 satellites was a result of the use of older generation Blue Walker III parts in the first five satellites and the impact of general inflation and supply chain issues.

15:20 This has increased our estimated per satellite costs to go up about 14%. Astrid from Toronto asked, can you stress test Blue Walker 3 in Ukraine? Starlink is already in heavy use there, and SpaceMobile would definitely add value by connecting emergency services and the eastern, southern parts of the country to broadband Internet.

15:44 Thank you, Astrid. Our technology architecture, which does not require a user terminal and is designed to connect directly with unmodified handsets, this is really ideal for when terrestrial networks are not available. For the Ukraine, we would love for our solution to someday support humanitarian missions and save lives. And this applies to natural disasters, outages, or other emergencies. But we do not currently plan to test the Locker Tree in Ukraine. Andrew from Pennsylvania asked, what do you anticipate being the biggest challenge for the launch and deployment of BW3?

16:23 Thank you, Andrew. Well, we will be continuously testing Blue Walker 3 all the way till we get it capsulated to the launch vehicle. That is planned for a launch that is scheduled early to mid-September. Between now and then, we'll continue a significant amount of testing, and we also continue preparing to be ready to launch by that date. All of that is being performed in the gate in the lost facility where the satellite will be launched. After that is completed with launch, we will be getting into space. We will be running an in-orbit test.

17:19 basically to make sure that everything continued to work as we get into space and then we get into our orbit. Then we deploy and then we continue, as I explained earlier, we continue our test campaign together with our network partners around the globe. So that's a very significant logistic. We have tests planned in every single continent where there is populations. Many test facilities and locations are being lined up for that. There's a lot of logistics required for that in order to do all the testing in a timely manner.

18:03 And with that, I'd like to thank our shareholders for submitting these questions. Operator, let's open the call to analyst questions now. At this time, we will be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question is from Griffin Boss with B Riley. Please proceed with your question.

18:44 Hey, thanks for taking my question. So, first off, we've obviously seen some strength in the stock recently. I'm not going to try to speculate on the exact drivers there, but it seems like the significant rally on the 11th came on the heels of the FCC announcement that SpaceX wouldn't be awarded the $900 million from the RDOF fund. Whether or not that contributed to the rally is anyone's guess, but At the end of the day, you're not competing directly against Starlink and the RDOF is unrelated to ASTS given that it's focused on fixed broadband. But I did want to come back to that topic of government funding in general. We know you're vying for a piece of the 5G fund in the U.S. I just was curious if you guys could provide any other colors. There are other government programs already out there internationally that you're looking to participate in or if you expect to see and many of those opportunities like that outside the U.S. in the future.

19:41 Hi, Griffin. Scott here. I'll take that one. So I think first off, we continue to believe that we qualify under a prospective 5G for America SEC fund. Details on that have not been released. It's still in process, but we continue to believe that we qualify for that based on the rulemaking from a little while ago. and that's an opportunity for us for sure. Globally, there are similar types of funding available. We haven't talked about those specifically but generally speaking, I'd say our message and our story has been pretty well received and there are, apart from grants, there's also government supported debt that's available and so I think our story continues to resonate well with governments and with regulators and, importantly, as we get closer and closer to a launch and we deliver the satellite to Cape Canaveral, seeing that satellite, seeing the tangible milestone has been very powerful with a lot of different audiences. But, yeah, we continue to believe we qualify for that prospective FCC fund, but we're in wait mode there.

20:58 Got it. Okay, great. Thanks, Scott, for that. And then next, so related to the upcoming Blue Walker 3 launch and then subsequent testing, If everything goes according to plan and there's no issues, obviously, with that technology risk in the rearview mirror, your ability to sign deals becomes much simpler. And I know you guys mentioned a few more in the quarter. That was good to see. But as we know, the Blue Locker One launch in 2019 was sort of the basis for investment from Vodafone, Rakuten, and AMT. And to the extent that you guys can discuss anything around that, have you been in talks with additional MNOs that maybe already have alluded to their willingness to sign MOUs in the event that the Blue Walker 3 testing is successful.

21:45 Yeah, at this point, we've signed up to an agreement or understanding with quite a lot of the global MNOs. So we're approaching 2 billion of subscribers under some form of agreement or understanding. The message continues to resonate quite nicely. Again, in the prior question I referenced, the tangibility, the delivery of the satellite, those are very powerful factors that our customers and regulators are pointing to. There are a few other large MNOs that are out there, over 100 million subscribers that we have not signed. But generally speaking, we're with nearly all the top MNOs who are not, say, in China or not Conflict with Vodafone. So really, we've made a lot of the progress there. I think for us, this tangible milestone is very powerful, and we'll continue to accelerate the customer conversations.

22:42 But we're pretty happy where we are at this stage.

22:46 Okay, yeah, that makes sense. So I just, along those lines, I know you mentioned the Nokia deal, and I was just hoping if you guys could elaborate a little bit more on that partnership and, you know, the role that Nokia is playing in the rollout and commercialization of SpaceMobile and, you know, how this agreement is sort of different than the other MNO agreements that we've seen in the past.

23:04 Yeah, absolutely. So regarding Nokia, you know, they're one of the top three global providers of RAM network hardware and software globally. So these are companies that sell to the same customers that are same customers. They sell equipment and software to the wireless companies who then use it to build out their network. You know, there's a technology that sits on the top of the tower, on the base of the tower, and then back at the network core. So they are a leader here, and they, together with Rakuten, who's a new entrant and one of our top investors, They're two providers of this equipment that'll sit back at the gateway, a couple locations within each country, and be part of the MNO network for connecting to our backhaul. So I think that's a real powerful indicator that we have someone like that working with us, and their off-the-shelf hardware and customized software will be very valuable for our MNOs and allow them to scale up very quickly.

24:12 All right, great. I appreciate that, Scott, and thanks again. Looking forward to the launch in September. Our next question is from Brian Kraft with Deutsche Bank. Please proceed with your question.

24:27 Hi, good afternoon. Great to see the progress of Blue Walker 3 and the launch coming in September. I wanted to ask you, though, about the announcement around the timing of the five Bluebirds that will launch in late 2023. I think it represents roughly two-quarter postponement from your disclosure in May. Assuming that's right, can you just talk about the factors behind the change in the timeline for the launches and also at this point what your overall timeline is for starting to commercialize the Bluebirds and generating revenue from the satellites? Thank you.

25:06 Hey, Brian. How are you?

25:08 Great, thanks.

25:10 The plan is to launch these five satellites in a single launcher, also on a Falcon 9. The idea is to actually start monetizing these initial satellites with a service that is non-continuous, but a service that allows us to start monetizing these satellites earlier rather than waiting for the complete block of satellites to be in place. This launch is to plan for later in 2023. It's a couple of things that we have done with them. So we are reusing a significant part of the design of Blue Walker 3, the avionics, the PEA, the software, in order to to review that as at the same time we're also having the next generation satellites in design and to start strategically the production of certain components for them.

26:26 So that's the rationale of that is basically to get to service with these initial satellites It will not be continuous service as we need more to have continuous service, but it will allow us to basically start monetizing with those initial satellites earlier than having the complete fleet.

26:54 So it sounds like early 2024. Is that the right way to interpret your statements at all?

27:02 Yeah, I mean, very late 2023, early 2024, yes. Okay.

27:08 Okay, great. And just your confidence level in that timeline for late 2023 on the launches? Sounds like you've got a lot of the pieces in place now, so it sounds like you're fairly confident in that.

27:23 Yeah, we announced earlier we have a reservation for that launch. We are basically taking advantage of everything that we have learned and built for Blue Walker 3. There's many, many, many lessons learned. We did build it first, and we're always applying them to our processes of build. Yes, I mean, as we continue to repeat the production of the satellites, The pace will be accelerating. So that's why we have taken this approach.

28:09 Okay, thank you. Our next question is from Caleb Henry with Quilty Analytics. Please proceed with your question.

28:20 Hi, guys. A few questions for me. The first five satellites, can you give any detail on how those will be different from the remainder of the Block 1 satellites, the other 15?

28:32 Yeah, the main difference is the FPGA-based. There are two differences. One is their size and mass. and then the other relevant difference is the usage of ASICs versus FPGAs. Those are the two distinct differences between the two satellites. Okay.

29:08 How much of a size difference are you looking at between the two different designs?

29:15 They're roughly around half between one and the other.

29:22 Okay, and so the latter ones, the ones with the A6, will be the smaller spacecraft?

29:28 No, they will be the larger.

29:30 They will be larger. Okay, so they'll be about twice as big. You mentioned that you guys have testing for the satellites in California, whereas manufacturing is in Texas and then launch for the time being is in Florida. Just wondering if there are any plans to try and consolidate testing to... a location that's either closer to manufacturing or launch or is not really an issue having it in California?

29:59 No, that was really a one-time event for all the subsequent satellites, both the environmental testing, which is one of many testing that we did. We have done over 800 tests in the spacecraft. and as I said earlier, we will be testing until we are completely encapsulated into the launch vehicle. Going forward, all satellites will be fully, we will not need to transport the Bluebird ones outside our facility.

30:37 Okay. And then this last question, so in terms of launching the remainder of the Block 1 satellites and then going beyond that, Do you have any timeline plan for the announcement of additional launch orders, or do you have additional launch capacity already secured with SpaceX beyond those first five?

31:00 Hey, this is Scott here. I'll take that one. So, you know, we have a multi-launch agreement with SpaceX, and so we did do some prepayments for additional launch. So that is, you know, that has been made, and that would go potentially for a second launch. In terms of components, we've put in place component suppliers for the first five satellites and for the next generation beyond that. Many components are already contracted as well. So we've got the planning in place. We try to be smart around long lead items and seeing into the future because obviously there's disruptions in the supply chain to manage that everyone's dealing with.

31:47 So we've been planning actively for the satellites to come after the first five, but at this time we're not going to announce when, but those are ones that we're obviously very focused on and we want to be building satellites as fast as we can. But we've taken the first five satellites as a single launch, as Abel said, kind of a chunky Waita to make a dent in the constellation, and that's one that we're doing as a first move, but we plan to have satellites behind that very closely.

32:25 All right. Those are all my questions. Thank you. Our next question is from Landon Park with Morgan Stanley. Please proceed with your question.

32:35 Great. Good afternoon. Thanks for taking the questions, everyone. Just on the Blue Walker 3 testing, can you, Abel, talk about what are the main issues that you think could arise during testing? What do you view as the biggest hurdles to sort of overcome? And what type of disclosure should we expect throughout sort of that six-month process of testing? Okay.

33:07 Hi, how are you? Okay, well, I think in order to answer that, I will have to split this in phases. So, the first test that gets performed is after we launch and get into orbit, we will perform an in-orbit testing, which basically will be to verify that all the components and the satellite itself arrive. and all the components are functioning as expected. That will be the first phase and we believe that will be in the first two weeks after launch.

33:54 Then after that, there will be a phase when we decide to deploy, basically to release the array and basically we had a phase array of approximately eight meter by eight meter that get deployed. We had cameras, we have potentially other satellites taking picture of that event and we're that close, that basically proved the mechanisms and the ability to open the satellite. The last events, we start basically We had a lot of this pre-planned and obviously I agree with the network operators when we start doing broadband directly to the cell phone with Blue Walker 3. So for that, we will have multiple opportunities to test with leading operators the satellite together with the Nokia and Rakuten equipment on the ground.

35:00 And we'll basically be able to demonstrate and broadband director to enhance it. That's kind of the last phase.

35:15 Thanks. Which of these do you view as the biggest hurdle for you to overcome?

35:23 Well, that's difficult to say. I mean, we had to spend over a year testing and verifying that all these states will will function as plan. So at this moment, our view on our is when we launch is because we are all the evidence that we think that everything will operate as planned. And that's also what we have faced. in-orbint testing, deployment, and then actual broadband to the cell phones.

36:06 And can you remind me what type of throughput per device you're expecting with the BlueWalker 3?

36:15 We're expecting 5G and 4G data rates. Of course, it's a test satellite, and we will be fine-tuning the network together with the operators We believe that we will be in compliance with the 5G specifications of the FCC for the 5G rural phone, starting even with BlueWalker 3. Of course, as we launch the additional satellites and we add additional improvement to them, we expect that to increase.

36:58 Okay, so... So just to make sure I'm understanding, with the Blue Walker 3, the service throughput will be more limited is the expectation? Is that because the testing is in such a narrow band?

37:11 No, we had at least in our experimental license, we had a 10 megahertz block for the testing. We have facilities in locations in Texas to perform the test. also in Hawaii. These are 10 megahertz spectrum allocated to us. We expect roughly one and a half bits per hertz on the uplink, two to three bits per hertz in the downlink. We have the spectrum located. We have approval from the FCC to do this testing.

37:52 That's 10 megahertz of TDD? I guess.

37:55 FDD.

37:57 Oh, sorry, FDD. Okay. So, okay. So it sounds like double digit downlink in terms of data rates. Okay. And what is the... Have you talked about the type of throughput per satellite you're expecting for BlueWalker 3 and what the ratio then is to the Bluebirds?

38:19 Yeah. I mean, the amount of... capacity per satellite is around 1.8 million gigabytes per month per satellite. That number will increase as we have satellites that we will be able to enable MIMO into the network. But the approximate capacity, tonnage of capacity that we Plans to support with this type of spacecraft is around that number.

38:56 Can you unpack that number in terms of what the assumptions are in terms of gross throughput and usable throughput are?

39:07 That is usable throughput into handsets that's billable.

39:15 Yes, I'm just wondering what are the underlying assumptions. What is the, in terms of gigabits per second, what is the throughput of the satellite?

39:24 Well, we had approximately 9 to 13 gigabits per second of trunking capacity back to ground that we can rain down into an area of approximately 2,800 kilometers of diameter. that moves around the Earth. And that, when you take into consideration as the satellite moves between areas where there are no phones and all of that, that's how you basically can get an estimation of the amount of tonnage of gigabytes that you can transmit into the handset.

40:19 Just to make sure I'm understanding, you said 9 to 13 gigs per satellite in terms of throughput?

40:25 Yes. Okay, and that's Blue Walker 3 or that's the initial Blue Bird?

40:29 No, that's Blue Walker 3. Sorry, those are the production satellites, Blue Bird 1.

40:35 Okay, perfect. Great, that's all very helpful. And then, Sean, just one question for you. Did you size the funding gap that you're expecting? We don't suppose that is yet. What we have been doing is giving guidance on how we're funded for the next 12 months, and we've also given guidance on a 20-satellite configuration.

41:01 And it sounds like your quarterly burn rate shouldn't exceed $50 million, it sounds like, over the next year, on average? Is that what you were saying? We're expecting cash operating expenses around $30. CapEx will go up or down, but it could be in that range, yes.

41:16 Okay, great. Thanks very much for all the questions. We have reached the end of the question and answer session, and I'll now turn the call over to Scott Wisniewski for closing remarks.

41:28 Thank you, operator. Our company is building a space-based cellular broadband network designed for use of the phone in your pocket today. We want to thank all of our shareholders for joining the call and their continued strong support of the AFP SpaceMobile mission. Thank you. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.